Conexio consulting

AUTOMOTIVE SECTOR DEVELOPMENT IN IRAN

AUTOMOTIVE SECTOR DEVELOPMENT IN IRAN

In 2011 Iran has 1,6 million automobile production which decreased almost half of it during the embargo. The foreign partners had to leave the country and the rest had to change their direction to limited spare parts for old models. Hyundai, PSA, Peugeot, Citroen left the country and Renault stayed to import and produce spare parts but couldn’t manufacture new models. Now, all these companies are turning back and companies like Mercedes Benz, Volkswagen, Kia, Fiat and Toyota started to participate in the fairs.

It is told that PSA made a pre-agreement with Iran and Minister of Industry put a condition before giving permition to the brand partners which is, 40% of vehicles to be sold in the market and after 5 years 85% of them should be produced in Iran. There are also requests like technology transferring and exporting. According to that, Renault started co-production with Khodro in its new models Captur and Clio4.

This developments in automotive will be useful for Turkey for sure. There were a considerable amount of exported products and spare parts from Turkey to this country. The country’s automotive sector has risen to the 19th place in the world, this year the Iranian automotive sector reached 12 billion dollars.

General Manager of Iranian Khodrom Haşim Yekezarem said that “considering that we have set important targets in Iran for automotive parts, Turkish investors can benefit from these opportunities”. If Turkish suppliers want to be active in Iran or to invest in Iran, there may be good developments between the two neighboring countries. Iran has tried to attract foreign investors in the automotive sector to provide its customers with the right equipment for their technology in terms of safety and quality.

General manager of Renault company , Carlos Ghosn said that Iran automobile market needs a supply of 2 million units until 2020, and Renault is very interested to expand in that market. Renault limited its production Iran but in this new situation is more that happy to do a comeback.

Turkish associations also have good thoughts about these progressions. Association of Vehicles Supply Industrials Manager said that, as the representatives of the automotive supply industry the key determinants for our steps forward into the country are stability and purchasing power of the population.

Conexio is a consulting firm in Turkey based in Istanbul that can provide you services and support you in your activities in the region.

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